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When an industry is changing rapidly, companies must adapt in order to survive. In this whitepaper, a global publisher was seeking a partner that could mitigate risk and build a platform flexible enough for their shifting customer expectations. The solution enabled the company to rewrite their operations game plan and transform their supply chain.

Join our panel of leading economic and transportation analysts as they share their exclusive insight on where rates are headed and the issues that will be driving those rate increases over the next 12 months.

Another week brought another increase in the price per gallon of diesel, with prices rising 2.1 cents this week to $3.534 per gallon, according to the Department of Energy’s Energy Information Administration (EIA). On an annual basis, diesel prices are up 77.8 cents.

Diesel prices have gone up for 11 straight weeks for a cumulative 37.2 cent gain, coupled with prices being above $3.40 per gallon for the fifth straight week since reaching $3.482 during the week of October 20, 2008. Current prices are at their highest level since reaching $3.659 the week of October 13, 2008.

This week’s price also represents the 20th consecutive week prices have been at $3 per gallon or more. Prior to the week of October 4, when diesel prices hit $3.00 per gallon, the price per gallon of diesel was below the $3.00 mark for 18 straight weeks. Meanwhile, the price per barrel of oil is currently trading at $85.53 on the New York Mercantile Exchange as of press time, following a two-year high when prices were over $92 per barrel, due to unrest over the political crisis in Egypt.

Even with oil trading down recently, some experts maintain that the price per gallon of diesel and regular gasoline could approach the $4 per gallon level, due to things like higher global demand for oil and a cold winter in many parts of the United States and Europe, leading to higher oil prices.

And as LM has reported, this could to a scenario where shippers need to be prepared to plan for higher energy prices, especially when taking into consideration the relatively low fuel prices they factored into transportation budgets for much of 2010.

The EIA is calling for 2011 crude oil prices to hit $93.26 per barrel, according to its recently-revised short-term energy outlook. This is above a previous estimate of $85.17 per barrel for 2011. On the diesel side, the EIA is calling for the price per gallon of diesel in 2011 to average $3.43, up from a previous estimate of $3.40.

Michael A. Regan, CEO & Chairman of the Board, TranzAct Technologies, wrote in a recent blog entry for LM that these ongoing diesel increase could have a hazardous effect on shippers’ freight budgets.

Regan explained that “shippers could be paying as much as 15% to 20% more for freight than they did in 2010 (depending on their fuel surcharge calculation).”

But Tom Kloza, chief oil analyst with the Oil Price Information Service said in an AP report that it would be a mistake to assume a repeat of 2008’s high gas and oil prices is s given.

Kloza explained that gasoline has climbed since November because of a temporary combination of forces that pushed energy prices higher, including stronger oil demand from China, a frigid winter in the United States and tension in Egypt, calling these events “a perfect storm.” He also predicted that crude demand will slide in the United States by May as refineries slow fuel production while they switch to summer blends of gas.

For more articles on diesel prices, click here.

About the Author

Jeff BermanGroup News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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